Pieces that caught my eye...
The commission has decided to permit foreigners to
participate in the sale scheduled for
Septmber 8, 1998. While the issue of "national security"
has been discussed by the
Ministry of Defense, Federal Security Service and other
law enforcement structures who
were members of the commission, it was decided that
foreigners will be allowed to
participate because the winner will not obtain a controlling
stake in the company and the
second tranche does not have blocking rights.
Seems that even in Russia, the idea of a foreign telephone company having power is not all that palatable. It seems to me that the issue of communications functions in the role of "command and control" for the military has been discussed before in relationship to some of the smaller countries. In those discussions, we have postulated that larger foreign telcos with "bigger muscles" may be viewed as a larger threat to this concern than smaller telcos...
IV. Most Promising Subsectors
The level of teledensity (the number of access lines per
capita) throughout Russia is
extremely low. According to the Telecom Newsletter,
published by TEC NIS in Russia,
Russia-wide average is about 19 lines per 100 people
(compared to 63 in the United States),
and waiting lists for telephone installation in Russia include
nearly seven percent of the
population. Waiting time varies by region and is about five
years average. In many regions
demand exceeds the total number of telephone lines, and
only 5-10 percent of the
applicants on regional waiting lists are serviced each year.
Monthly tariffs are growing;
future time-based local tariffs have been announced in
some regions, prices for
long-distance calls are extremely high, and customer
service is almost non-existent. The
residential installation fee varies from USD 120 to 1,000.
Given this situation, significant
future growth for telephone providers is expected.
This section indicates that there is plenty of room to grow and plenty of pent up demand. This is a situation that allows for large margins for those that can get in at the beginning... Of course, growth and profits will also be affected by the local economy and exchange rates, just to name a few factors...
Lazarus
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